He writes such good judgments.  They are so easy to read.  Apparently he is never wrong.  Certainly as far as I am aware, the Court of Appeal has never found that he has erred.  So it is with some trepidation and hesitation that I suggest that when it comes to what happens if the payment provisions in a construction contract do not comply with all the relevant provisions of the HGCRA, HHJ Coulson has got it wrong.

HHJ Coulson appears to suggest in his recent judgment of Fenice Investments Inc v Jerram Falkus Construction Limited [2009] EWHC 3272 (TCC) that if any part of the payment provisions of the HGCRA are not properly and fully incorporated into the contract, the payment provisions as set out in the Scheme apply lock stock and barrel (see paragraphs 40, 41 and 43).  This follows the line which he appears to set out in his book “Construction Adjudication” (see paragraph 3.10).  However, at paragraph 3.97, he suggests that the matter still needs to be determined by the appellant courts.  The Scots of course have concluded that the payment provision in the Scheme only apply in so far as and to the extent that the contract does not contain the particular provision required by the HGCRA (Hills Electrical & Mechanical Plc v Dawn Construction Ltd [2004] SLT 477).

In my opinion, the Scots are right and the importing of all the payment provisions does not have proper regard to the wording of either the HGCRA or the Scheme.  The 2 cases which HHJ Coulson refers to in his book Aveat Heating Ltd v Jerram Falkus Construction Ltd [2007] EWHC 131 (TCC) and John Mowlem Ltd v Hydra-Tight Ltd [2002] 17 Const LJ 358 concern adjudications and not payment.  Looking at the payment provisions and taking, for example, section 110 of the HGCRA.  Section 110(1) and (2) requires the contract to provide, amongst others, an adequate payment mechanism for determining what payments becomes due and a payment notice.  Section 110(3) goes on to state that “If or to the extent that a contract does not contain such provision as is mentioned in subsection (1) or (2), the relevant provisions of the Scheme …” applies (my emphasis).  Turning to the Scheme itself, paragraph 1 Part II of the Scheme, again, at least in my opinion, refers to inserting no more than the “relevant provisions” of paragraphs 2-4. 

While it would not be the first time that I stick my neck out only to have it chopped off, I have got a feeling that, unlike in relation to the adjudication provisions, where I accept that it is an all or nothing situation, HHJ Coulson is wrong when he says the same about payment.  I believe the Scheme simply fills the gap, if necessary, very much on a pick and mix basis rather than take it or leave it.

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